Are Markets and the Fed on the Same Page?

9/19/2013 10:56AM

Is there a disconnect between the markets and the Federal Reserve? The markets may not have fully baked in the data the Fed has in its hands to cause it not start tapering its bond buying. Rex Macey, Wilmington Trust chief investment officer, joins MoneyBeat. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... by now what you've read about what ... yesterday ... near where was the reaction was in the markets yesterday stocks jumped on for ... ever ... but everything jump really ... looked at NBC the Dow down a little bit ... basically flat all the markets really Nasdaq up a little bit the Essen P is also basically flattish ... as the market digests what happened yesterday ... you wonder you look at the reaction yesterday in the markets due to what the Fed actually said you wonder did that did the market actually get the message the Fed delivered yesterday ... talk about that we like that with those Wilmington Wilmington Trust's chief investment officer Rex Macey morning right thing to come in on this morning ... I'm so this is something that that you brought up actually just do you think the market got the message the Fed delivered yesterday but you know it's interesting how much it jumped yesterday when the message from the federally is ... growth is not as strong as we expected this we would like to begin tapering ... and yet it junk stuff in the market ... today is digesting them looking as the growth rates in the Fed look in thinking about what ... is going on in the housing market ... is it going to hit a ball ... with mortgage rates that were a hundred basis points higher than had been ... to the markets can to digest it I think we got the move yesterday and I think if you will they be brought on more punch yesterday was made a little hangover today planned for this to the real part of that I mean ... look we know corporate profits have been doing the past few quarters when or revenue growth for for revenue growth is in the past few quarters when will we growth is one of the jobs numbers we know all these things that the Fed also knows ... and yet ... it seems like the markets only concern is ... the punchbowl is the liquidity is what the Fed is doing ... I how healing would you guys are it will matter how you swear those two things if you're an investor ... well we are looking at earnings in one of things we've been yell I'm so there's been a slowdown in the growth of earnings from where we connected summary in the fourth quarter and into next year ... so that that that said you know ... what were looking for ... a we think it happens ... what you know we've got your over years or six percent growth rate in earnings come in numbers ... that's the key to driving up stock prices along this is all about earnings ... um ... you know the Fed ... the other people are either Fed policy hasn't helped any ... we think it has but modestly a little bit of aam ... tellittoal wizard in the woods or bonds ... it has instilled confidence in people need confidence in an economy from it but that's all you too ... there's a benefit that yes ALM ... so I think there is the psychological aspect what's going on here who is itching ... to the psychological aspects of me when the Fed was just thinking ... about winding down QE three over the summer ... you saw mortgage rates jump on the field getting out in front of that ... body do you think that that was a big part one factored into the fed into the Fed decision yesterday ... and we think the economy goes if rates are rising ... what a better one rate rising if there's really demand for credit because there's growth from that's great ... ok ... but if there are other factors involved and ... the Nikkei could be detrimental so I think the Fed is very careful to understand what is driving ... the increase in ... rates ... and a little nervous about a hundred basis point rise in what's that guy's that's a significant move in the mortgage is on pace to give it to under fifty thousand our house and ... you're paying for a half percent on year Morrison during a half ... that's a significant change ... in the affordability of housing ... here ... is what you think when you look at the investment landscape ... I'll what he is like we think is attractive ... what we like equities more than puppets we still you know bonds or so the lousy bargain at this point we like ... stocks better ... but you know is a longer term investors ... you know if I had to pick a time to own stocks ... I'm not sure two thousand thirteen is the PS I'm sure thirty thousand thirteen ... is not the best time ever on stock to get that that is money somewhere ... stocks in a place to be there are a crazy woman can trust things coming on to the priest enter